Video-Game Biz Is Growth Area For Law Firms

In 2003, the video-game industry generated $7 billion in sales. The continued success of this industry has created opportunities for law firms to expand their services into the video-game field. For example, being on top of developments in the video-game industry is a priority for San Francisco's Morrison & Foerster. The firm recently formalized a 25-lawyer video-game practice in response to its ever-increasing business with the industry.

While many firms have ventured into the field and litigated big cases, Morrison is among the first to have a formal video-game practice area within the firm. Other firms may soon follow suit.

According to Morrison partner William Schwartz, his firm's focus on the entertainment and technological fields and its office locations in California, Japan, Korea and the United Kingdom ' where most of the video-game companies are located ' have given Morrison & Foerster an edge.

Morrison & Foerster currently represents two dozen video game companies, including Atari Corp., Disney Interactive and Sega Corp., as well as video game publishers, content owners and technological companies.

Video-game law has come a long way in the last 20 years. Until a 1983 ruling by the U.S. Court of Appeals for the Third Circuit, it was not clear if computer software copyright could be protected. Apple Computer Inc. v. Franklin Computer Corp., 714 F.2d 1240.

Before that 1983 ruling, attorneys had to resort to some creative litigating.

Pac Man Strategy

Neil A. Smith, one of the earliest attorneys in the field, represented Namco, the makers of the arcade game Pac Man when that game was a top seller. Smith – a director of the litigation department at San Francisco's Howard, Rice, Nemerovski, Canady, Falk & Rabkin and chair of the American Bar Association's Internet and Cyberspace Committee ' registered the game's “attract mode,” or demonstration of the game being played, as an audio-visual work. Namco continues to protect Pac Man through this form of copyright registration.

Though no lawyers in Smith's firm work exclusively in the field, many of them do handle video-game cases.

“Legal issues from video games have often served as an incubator and crystal ball for the development of later intellectual property law,” Smith says.

Lawyers continually negotiate deals so that their clients can acquire and safeguard the cutting-edge technology needed for the games, says Russell Weiss, a partner with Morrison & Foerster.

Weiss says he also looks out for “file sharing,” or illegally downloading a game over the Internet. Though not as prevalent in the video-game industry as in music, Weiss says it has been a factor when negotiating with distributors to ensure their methods will make it hard to download the game illegally.

In fact, the file-sharing issue traces its beginnings to the video-game industry.

Smith represented Sega Enterprises in a 1994 case to stop the Internet file sharing of Sega games. Sega v. Maphia, 857 F. Supp. 679 (N.D. Calif. 1994). The ruling was cited in the landmark Napster case. A&M Records Inc. v. Napster Inc., 114 F. Supp. 2d 896 (N.D. Calif. 2000).

(In recent litigation involving the video-game industry, several major video-game companies sued 321 Studios in Manhattan federal court in June alleging that software enabling consumers to copy games onto CDs and DVDs violates the Digital Millennium Copyright Act.)

Larry Walters of Weston Garrou & DeWitt in Altamonte Springs, FL, says video-game clients make up about 20% of his practice.

Walters' firm focuses on issues regarding free speech and preventing government censorship. Since the industry has been under fire recently regarding the use of sexual or violent images in games, Walters advises his clients on the content of their product as well as what rating they may receive by the Entertainment Software Rating Board.

Because of the limited resources of the 11-member firm, only Walters and one colleague handle work in the video-game industry. He says, however, that they are continually forced to turn down work, and adds that the demand exists to form a practice group in the industry.

In 2003, the video-game industry generated $7 billion in sales. The continued success of this industry has created opportunities for law firms to expand their services into the video-game field. For example, being on top of developments in the video-game industry is a priority for San Francisco's Morrison & Foerster. The firm recently formalized a 25-lawyer video-game practice in response to its ever-increasing business with the industry.

While many firms have ventured into the field and litigated big cases, Morrison is among the first to have a formal video-game practice area within the firm. Other firms may soon follow suit.

According to Morrison partner William Schwartz, his firm's focus on the entertainment and technological fields and its office locations in California, Japan, Korea and the United Kingdom ' where most of the video-game companies are located ' have given Morrison & Foerster an edge.

Morrison & Foerster currently represents two dozen video game companies, including Atari Corp., Disney Interactive and Sega Corp., as well as video game publishers, content owners and technological companies.

Video-game law has come a long way in the last 20 years. Until a 1983 ruling by the U.S. Court of Appeals for the Third Circuit, it was not clear if computer software copyright could be protected. Apple Computer Inc. v. Franklin Computer Corp ., 714 F.2d 1240.

Before that 1983 ruling, attorneys had to resort to some creative litigating.

Pac Man Strategy

Neil A. Smith, one of the earliest attorneys in the field, represented Namco, the makers of the arcade game Pac Man when that game was a top seller. Smith – a director of the litigation department at San Francisco's Howard, Rice, Nemerovski, Canady, Falk & Rabkin and chair of the American Bar Association's Internet and Cyberspace Committee ' registered the game's “attract mode,” or demonstration of the game being played, as an audio-visual work. Namco continues to protect Pac Man through this form of copyright registration.

Though no lawyers in Smith's firm work exclusively in the field, many of them do handle video-game cases.

“Legal issues from video games have often served as an incubator and crystal ball for the development of later intellectual property law,” Smith says.

Lawyers continually negotiate deals so that their clients can acquire and safeguard the cutting-edge technology needed for the games, says Russell Weiss, a partner with Morrison & Foerster.

Weiss says he also looks out for “file sharing,” or illegally downloading a game over the Internet. Though not as prevalent in the video-game industry as in music, Weiss says it has been a factor when negotiating with distributors to ensure their methods will make it hard to download the game illegally.

In fact, the file-sharing issue traces its beginnings to the video-game industry.

Smith represented Sega Enterprises in a 1994 case to stop the Internet file sharing of Sega games. Sega v. Maphia , 857 F. Supp. 679 (N.D. Calif. 1994). The ruling was cited in the landmark Napster case. A&M Records Inc. v. Napster Inc., 114 F. Supp. 2d 896 (N.D. Calif. 2000).

(In recent litigation involving the video-game industry, several major video-game companies sued 321 Studios in Manhattan federal court in June alleging that software enabling consumers to copy games onto CDs and DVDs violates the Digital Millennium Copyright Act.)

Larry Walters of Weston Garrou & DeWitt in Altamonte Springs, FL, says video-game clients make up about 20% of his practice.

Walters' firm focuses on issues regarding free speech and preventing government censorship. Since the industry has been under fire recently regarding the use of sexual or violent images in games, Walters advises his clients on the content of their product as well as what rating they may receive by the Entertainment Software Rating Board.

Because of the limited resources of the 11-member firm, only Walters and one colleague handle work in the video-game industry. He says, however, that they are continually forced to turn down work, and adds that the demand exists to form a practice group in the industry.